1. PROMITHEAS – 4 Development and Assessment of Mitigation / Adaptation Climate Change policy portfolios for Ukraine Policy mixtures and Assessments Evgenij Inshekov, Mariia Kokorina Institute for Energy Saving and Energy Management National Technical University of Ukraine “KPI” Athens, 9 October 2013

2. Outline Introduction Business-as-usual scenario Optimistic scenario
Pessimistic scenario
Assessment of scenarios using AMS method
Conclusion
Needs and gaps

3. Introduction Objectives of the Ukrainian climate change policy
Spectrum of climate change mitigation options for Ukraine
Spectrum of adaptation needs in Ukraine

4. Objectives National objectives:
Ensure reduction of annual energy consumption by 318 mtce until year 2030
Increase the percentage of coal in the energy balance from 22% in 2005 to 33% by 2030
Decrease the share of the imported fuels in the energy balance from 54,8% of the total primary energy supply to 11,7%
Reduce natural gas consumption by 18,8% of primary energy needs in 2030
Increase the share of renewables by 9,5 Mtoe during the period and for the period by 26,1 Mtoe ( 12% of Ukraine’s primary energy needs)
Achieve a contribution of biomass to the total primary energy consumption by 5% in 2020 and 10% in 2030, including 10% target for the share of biofuels in transport by 2020
Reduction of energy consumption by 30,95 million tons of equivalent fuel in 2015.
Documents:
Energy Strategy of Ukraine until 2030
Updated Energy Strategy until 2030
Biomass Action Plan for Ukraine
State Target Economic Program on energy efficiency and the development of energy production from renewable energy sources and alternative fuels for

5. Mitigation options Exploitation of RES Energy efficiency
Mitigation through JI and GIS

6. Adaptation needs Energy sector Agricultural sector Forestry sector
Water resources

7. Scenarios
Business-As-Usual
Optimistic
Pessimistic

8. Business-As-Usual Scenario
Mitigation and adaptation policy instruments were implemented before ;
The Ukrainian BAU scenario is mainly a mitigation policy portfolio:
penetration of RES in the gross final energy consumption,
support to increase energy efficiency;
GHG emission reductions through JI and GIS

9. BAU - Key Assumptions
Demographics: “medium variant” of the population projections are used for all 3 scenarios (BAU, OPT, PES);
Economy: GDP growth rate is assumed to be 3,5% based on IMF projections for all 3 scenarios;
Climate statistics:
the annual precipitation change was considered to follow its historical growth;
the average air temperature change following historical trends by 2020;
T&D losses is assumed to reach level of 0,6%. For natural gas, oil and heat 0,5% and for coal 1%;
Feed-in-tariffs follow their historical trends;
Projections for the global trends prices are provided by KEPA.

10. BAU – Energy Demand
Figure 1: Final Energy Demand per sector

11. Figure 2: Final Energy Demand per fuel
BAU – Energy Demand
Figure 2: Final Energy Demand per fuel

12. Figure 3: Transformation: Electricity Generation
BAU – Transformation
Figure 3: Transformation: Electricity Generation

13. Figure 4: Share of Heat Production by fuel type
BAU – Transformation
Figure 4: Share of Heat Production by fuel type

14. Optimistic Scenario
Mitigation/adaptation policy instruments Estonia has set into force after ;
Maximum exploitation of the potential of the country in energy efficiency and renewable energy sources;
Wider range of policy instruments:
performance standards;
financial policy instruments (subsidies and grants);
Additional instruments in accordance with EU climate change policy, which can be adapted to the needs and priorities of the country
Additional legislation regarding energy efficiency in residential and public buildings

15. OPT - Key Assumptions
OPT policy portfolio sets stringent mitigation targets in all sectors;
Climate statistics:
the annual precipitation growth rate amounts 1,5%;
the average air temperature is assumed to be 11,5 ˚C by 2020
T&D losses is assumed to decrease by 0,4% annually;
RES target capacity by 2030 will count at least 10% of installed capacity
Households: reduction of natural gas consumption from 52% in 2015 to 40% in 2030, increase of biomass use up to 6% by year 2020, as a result increase of coal share in the total energy consumption;
Technological improvements in the road branch are foreseen, resulting to 20% energy savings by 2015 and to 40% by 2030.

16. Figure 5: Final Energy Demand in Household Sector
OPT – Energy Demand
Figure 5: Final Energy Demand in Household Sector

17. Figure 6: Final Energy Demand in Transport Sector
OPT – Energy Demand
Figure 6: Final Energy Demand in Transport Sector

18. Figure 7: Transformation: Electricity Generation
OPT – Transformation
Figure 7: Transformation: Electricity Generation

19. Pessimistic Scenario
Mitigation/adaptation policy instruments Ukraine has set into force after ;
No other additional policy instruments apart from those already decided to be implemented and in line with the EU climate change policy;
The minimum exploitation of the potential of Ukraine in energy efficiency and RES by limiting the possible technological options only to the promotion of the most promising for Ukraine RES i.e. biomass and wind power.

20. PES - Key Assumption Climate statistics:
precipitation is increased by an annual growth rate of 0,75%
the average air temperature is assumed to be 13,5 ˚C
T&D losses for electricity is assumed to be 0,8% and for heat 0,6%
Increase of biomass use in households up to 3 % by year 2020
Technological improvements in agriculture are assumed, resulting to 1,25% energy savings in 2020 compared to the amount of year 2009
Technological improvements in the industry are assumed, resulting to 2,5% energy savings compared to the respective amount for each branch of year 2010
Technological improvements in the road branch are foreseen, resulting to 10% energy savings by 2015 and to 20% by 2030.

21. Figure 8: Final Energy Demand in Household Sector
PES – Energy Demand
Figure 8: Final Energy Demand in Household Sector

22. Results of LEAP - Demand
Figure 9: Comparison of energy demand for the 3 scenarios.

23. Results of LEAP - Transformation
Figure 10: Comparison of the electricity generation results for 3 scenarios

24. Results of LEAP – Global Warming
Figure 11: GHG emissions for Ukraine till 2050 for 3 scenarios

25. Assessment of scenarios using AMS method – General comments
AMS - multi criteria method;
AMS method combines three multi-criteria methods:
Analytical Hierarchy Process (AHP)
Multi-Attribute Utility Theory (MAUT)
Simple Multi-Attribute Ranking Technique (SMART)
AMS is developed for evaluating climate policy instruments, relevant policy mixes and their interactions;
Three criteria are applied in AMS:
environmental performance
political acceptability
feasibility of implementation

26. Assessment of scenarios using AMS method – Required data
Total emissions for the country
Emissions per sector for the country
Other environmental effects for the country under each scenario
Water use for cooling (Energy sector)
Table 1: Total emissions for Ukraine

27. Table 2: AMS results for each scenario
AMS method - Results
Criteria
Scenarios
BAU
ОPT
PES
Direct contribution to GHG emission reductions (0,833)
1,467
83,300
0,000
Indirect environmental effects (0,167)
16,700
Environmental performance (0,675) - A
100,00
Cost efficiency (0,390)
47,300
9,466
Dynamic cost efficiency (0,227)
5,078
8,044
Competitiveness (0,103)
3,775
0,949
Equity (0,188)
0,295
17,500
Flexibility (0,056)
1,555
2,464
0,981
Stringency for non-compliance (0,036)
1,133
Political acceptability (0,259) - B
11,837
80,217
17,608
Implementation network capacity (0,228)
11,743
7,413
Administrative feasibility (0,685)
21,994
14,112
Financial feasibility (0,088)
2,639
4,181
Feasibility of implementation (0,065) - C
36,376
25,705
37,918
Total (A+B+C)
12,401
78,416
16,559
Table 2: AMS results for each scenario

28. Conclusions BAU scenario:
GHG emissions will be increased compared to those of year 2005 by almost 65%.
The RES share in the transport sector for year 2020 is 5% (due to the absence of supportive mechanisms)
OPT scenario:
GHG emissions in Ukraine will increase by 51% in 2020 compared to those of year 2005
The share of RES in the transport sector in 2020 will be 4,7% (biofuels), and 11,2% in electricity production.
The final energy consumption in 2020 will be reduced by 5% compared to that of BAU for the same year.
PES scenario:
GHG emissions in Ukraine will increase by 65% in 2020 compared to those of year 2005
The share of RES in the transport sector in 2020 will be 2,4% and in the electricity generation it will be 7,35%
The final energy consumption in 2020 will reduced by 2% compared to that of BAU for the same year.

29. Conclusions AMS assessment:
the mitigation/adaptation policy portfolio in the Optimistic scenario is the best one in terms of overall performance;
but requires the encouragement of business investments in RES and energy efficiency projects, the continuation of the demonstrated effectiveness of the implementation network and more stringent frame for non-compliance.
Problems:
the lack of several reliable data: GDP distribution per sector, energy efficiency in sectors, energy balance of the EU standards, initial data in tourism and health service, transport sector, etc.
significant gaps and uncertainties in the available data;
the component of adaptation in climate change policy is not fully developed, it requires data related to the frequency of extreme events, water resources and use, low-income groups, biodiversity, etc.
Future work:
the report should include more scenarios with the combinations of population and GDP growth.

30. Needs and gaps
Information gaps concerning Historical data for Key assumptions:
No data is available in climate statistics for frequency of extreme events (more specifically - heat waves per year, frost days per year) for any year in the studied period. As far as territory of Ukraine can be divided into four different climatic regions: cool snow forest climate, steppe climate, Mediterranean climate and mountain tundra climate, calculation of the previously mentioned parameters is almost impossible. All the climate statistics in Ukraine collected by Central Geophysical Observatory.
No data is available for GDP Deflator with the reference year 2009 to the whole studied period.
No data is available for the manufacturing value added for all the industrial sectors. The lack of data applies to the whole studied period. The State Statistic Service of Ukraine (SSSU) has available the primary data needed to calculate the added value for all the sectors.
No data is available for a volume of water for cooling in energy water use for any year in the studied period. State Statistic Service of Ukraine is responsible for all statistical data and should include this indicators to the list.

31. Needs and gaps (2)
Information gaps concerning Historical data for Energy Demand
No energy demand cost data is collected for the all specific sectors of the Ukrainian economy (Households, Agriculture, Services, Industry, and Non-Energy Use) and their sub-sectors. This applies to the whole studied period. This indicator could be calculated for all the sectors mentioned above based on the data provided by energy companies and SSSU.
There are no available data for energy demand, consumption and costs , final energy intensity for the particular Service sub-sectors, such as Tourism and Health Services. This applies to the whole period These sectors included to the common branch Other by SSSU.
In Transport sector, the energy demand data in each type of transport (Road, Rail, Air, and Water) is available, but it is not further broken down into Passenger transport and Freight transport. This applies to the whole studied period.
There are no data for final energy intensity and demand cost (including per fuel) for all Transport subsectors.

32. Needs and gaps (3)
Information gaps concerning Historical data for Energy Transformation:
All financial data required in this section of the database are not available. In particular, there is no available data about the Capital Costs, Fixed OM Costs, Variable OM Costs, and Salvage Value of the energy capacities in the Transformation branches.
There are no data about the Maximum Availability, Capacity Credit, and Process Efficiency of any Transformation process.
There are no available data for import and export targets for all transformation branches for the whole studied period.
No data for potential , efficiency and raw losses available for all transformation branches. This applies to the whole studied period. This data available only at the individual energy production companies.
General information gaps:
Ukrainian statistic reports have different structure, branches and content compared to Eurostat. Only 3 energy balances (years ) published by SSSU respond to the requirements of the Eurostat.
Most data (such as branches and sub-branches of energy demand, transformation and production) for the period of is not available that is why all calculations done using data form year 2000.  Because of a different statistic collecting system previously mentioned data were collected and provided by IEA.

33. National Workshop
Development and Assessment of Mitigation / Adaptation (M/A) Climate Change policy portfolios for Ukraine
Monday 10 June 2013
Venue: Academic Council Hall of National Technical University of Ukraine “Kiev Polytechnic Institute", 37, Peremogy Avenue, Kiev 03056, Ukraine

35. Thank you for your attention!